As if American workers donāt have enough to worry about right now, the COVID-19 pandemic is resurfacing concerns about technologyās impact on the future of work.Ā Put simply, any coronavirus-related recession is likely to bring about a spike in labor-replacing automation.
Whatās the connection between recessions and automation? On its face, the transition to automation may appear to be a steady, long-term trend. At the same time, it might seem intuitive that any rise unemployment in the coming months will make human labor relatively cheaper, thus slowing companiesā move to technology. Unfortunately for the workers poised to be affected by automation, this is not the case.
Robotsā infiltration of the workforce doesnāt occur at a steady, gradual pace. Instead, automation happens in bursts, concentrated especially in bad times such as in the wake of economic shocks, when humans become relativelyĀ moreĀ expensive as firmsā revenues rapidly decline. At these moments, employers shed less-skilled workers and replace them with technology and higher-skilled workers, which increases labor productivity as a recession tapers off.
Several economists have outlined this cyclical nature of automation. Nir Jaimovich of the University of Zurich and Henry E. Siu of the University of British Columbia reported that over three recessions in the last 30 years, a whopping 88% of job loss took place in āroutine,ā automatable occupationsāmeaning such jobs accounted for āessentially allā of the jobs lost in the crises. Brad J. Hershbein of the W.E. Upjohn Institute and Lisa B. Kahn of the University of Rochester looked at almost 100 million online job postings before and after the Great Recession and found that firms in hard-hit metro areas were steadily replacing workers who performed automatable āroutineā tasks with a mix of technology and more skilled workers.Ā So, even as robots replace workers during boom times at places such asĀ AmazonĀ andĀ Walmart, their influx surges during recessionsānot great news for the nationās jittery workers.
As virus-relatedĀ recession fearsĀ escalate, it is important to stress that while automation is likely to surge in general, not everyone is equally vulnerable. As our 2019 assessment of automation trends suggests, it is low-income workers, the young, and workers of color who will be vulnerable if this pandemic shoves the nation into a recession.Ā The automation surge is likely to affect the most āroutineā occupationsājobs in areas such as production, food service, and transportation, for example.
Altogether, our research flags some 36 million jobs that have a āhighā susceptibility to automation. (That doesnāt mean theyĀ will beĀ automated, just that they could be.)
As to what particular groups of workers may be the most exposed, the threats are not evenly distributed.Ā As restaurants and bars shut down during the pandemic, young workers may be at higher risk because of their heavy concentration in the food industry. Similarly, Latino or Hispanic workers could be more exposed than any other racial or ethnic group given their overrepresentation in food service jobs, production, and constructionāareas that are likely to be stressed in the coming months.
In terms of geography, our previous work has shown that Rust Belt areas, which have already been hollowed out by previous rounds of industrial automation, remain vulnerable to further robotics and software investmentānot just in manufacturing but in the service sector as well. The pandemicās damage to global industrial supply chains underscores the vulnerability of such manufacturing regions.Ā
As for what all of this means for the future, the potential of an automation surge reinforces the fact that any coming recession wonāt only bring an end to the nationās plentiful supply of jobs. Any downturn is likely to bring a new bout of structural change in the labor market and its demand for skills. If it extends for a while, the downturn could induce firms in food service, retail, and administrative work to restructure their operations toward greater use of technology and higher-skilled workers. For Americaās beleaguered lower-skill workers, these changes will complicate the return to normalcy.
There likely will be no rest for the weary if COVID-19 lingers. Along with a public health crisis and epidemic of illness, the virus may well prompt a new spike of automation and lasting changes to an already rapidly evolving job market.
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Commentary
The robots are ready as the COVID-19 recession spreads
March 24, 2020